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Mplus Market Pulse - 14 Mar 2023

Publish date: Tue, 14 Mar 2023, 09:03 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Bargain hunting may emerge

Market Review

Malaysia:. The FBM KLCI (-0.8%) recorded its fourth day of losing session as the negative sentiment is largely in line with the weakness across the regional peers. The lower liners also remained downbeat, while the plantation sector (+0.4%) was the sole winner amongst the sectorial peers on reports of easing labour shortages.

Global markets:. Wall Street edged lower as the Dow fell 0.3% after a choppy trading session as the gains in technology shares were negated by the weakness in banking shares. The European stockmarkets extended their slide, while Asia stockmarkets closed mostly in red.

The Day Ahead

The FBM KLCI declined for the fourth straight session as the turmoil in the US banks weighed on broader market sentiment. We expect investors will be focusing on the consumer price index that will be released later today. While investors may start pricing in the possibility of pausing rate hikes following the banking crisis in the US, volatility may remain in place on fears over potential slowdown in the economic activity going forward. On the local bourse, defensive sectors with solid fundamentals may be set for a rebound. Commodities wise, the Brent crude oil price dropped below USD81, while the CPO is still trading around RM4,000.

Sector focus:. In view of the mild rebound on Wall Street, the market could have priced in the near term impact of the banking crisis. Also, the local technology stocks may rebound on bargain hunting activities. Besides, we expect investors to hunt for defensive stocks within the consumer, telco and utilities sectors.

FBMKLCI Technical Outlook

The FBM KLCI remained under pressure as the key index crossed below the support at 1,430. Technical indicators remained weak as the MACD Histogram turned into a negative bar, while the RSI is hovering below the 30 oversold level. Next support is monitored at 1,400, followed by 1,380, while the resistance is pegged along 1,450-1,460.

Company Brief

Perdana Petroleum Bhd’s wholly-owned subsidiary, Perdana Nautika Sdn Bhd, has accepted 3 letters of award (LoA) from Dayang Enterprise Sdn Bhd (DESB) worth RM18.3m. The LoA was for the charter 1 accommodation workbarge and 2 anchor handling tug and supply vessels (AHTS). Durations of the vessel charters were for a firm period of 90 days commencing from 14th February 2023 for the workbarge and 15th February 2023 and 18th February 2023 for the AHTS. (The Star)

Bermaz Auto Bhd’s 3QFY23 net profit jumped 114.1% YoY to RM87.3m, on the back of higher revenue, which was slightly offset by higher income tax and foreign exchange loss. Revenue for the quarter grew 56.6% YoY to RM976.0m. A third interim dividend of 4.5 sen per share, payable on 5th May 2023 was declared. (The Edge)

The manager of Sunway Real Estate Investment Trust has confirmed that it is in talks to buy retail assets from the Employees Provident Fund saying negotiation of terms are still in progress. While it cannot confirm the terms of the agreement as talks are still ongoing, the REIT expects to enter into an agreement with the EPF as soon as possible, subject to agreement of terms and the board's final approval. (The Edge)

S P Setia Bhd announced its final dividend of 1.47 sen per ordinary share in respect of FY22, payable on 20th April 2023. The group also announced its preferential dividend of 6.49% per annum per Islamic redeemable convertible preference shares (RCPS-i A) and 5.43% per annum per Class C Islamic redeemable convertible preference shares (RCPS-i C). Both are payable semi-annually and based on the issue price of RM1.00 and 38 sen respectively and to be also paid on 20th April 2023. (The Edge)

Scientex Packaging (Ayer Keroh) Bhd’s 2QFY23 net profit rose 14.4% YoY to RM13.4m, thanks to softening of raw material prices, favourable product mix and lower freight cost. Revenue for the quarter grew marginally by 1.8% YoY to RM198.1m. (The Edge)

Volcano Bhd has been issued an unusual market activity (UMA) query after its shares spiked 23.9% on 13th March 2023. Shares of the ACE Market-listed company closed at RM1.09 with 23.4m shares traded. Year to date, the counter has climbed 124.7%. (The Edge)

Revenue Group Bhd announced the appointment of 5 new directors to its board, as well as a new chief financial officer (CFO), effective 13th March 2023. The epayment solutions provider has appointed Teh Chee Hoe as executive director, and 4 independent, non-executive directors, namely Kamari Zaman Juhari, Azman Hisham Che Doi, Chandera Sekaran @ Dawson, and Krishnan Dorairaju. Ng Kuan Horng was named as its new CFO. (The Edge)

Pimpinan Ehsan Bhd has added to its regularisation plan by entering into a third supplemental agreement in relation to the proposed acquisition of reNIKOLA Holdings Sdn Bhd and its subsidiaries, to include the purchase of an additional renewable energy (RE) asset for RM13.9m. The supplemental agreement includes the proposed acquisition of Idiwan Solar, which operates a solar photovoltaic power generation project in Machang, Kelantan. The solar plant has an aggregate capacity of approximately 45.0-MW direct-current (MWdc) and achieved initial operation in January 2023. (The Edge)

Five shareholders of Classita Holdings Bhd are seeking the court's permission for them to take legal actions on behalf of the lingerie maker against its board members and vendor. The five shareholders – Datuk Seri Tee Yam, Datuk JP Low Kok Chuan, Leow Boon Kin, Zhang Jia and former executive chairwoman Datin Seri Jessie Wong Siaw Puie – are seeking permission from the Kuala Lumpur High Court to act on behalf of the company in a suit filed in the Ipoh High Court, plus another suit filed in the Shah Alam High Court, and the suit in the Court of Appeal. (The Edge)

Fitters Diversified Bhd has justified its acquisition of 12.1m shares in Computer Forms (Malaysia) Bhd due to the latter’s involvement in the electric vehicle (EV) industry. The group rationalised the acquisition of Computer Forms after CFM’s joint venture agreement with EA Mobility Holding Co Ltd on 5th February 2023 to sell, distribute, assemble and produce EVs in Malaysia. The Edge)

Country View Bhd has appointed former Dewan Rakyat Speaker Tan Sri Azhar Azizan @ Harun as its independent and non-executive director. Azhar Harun was the Dewan Rakyat Speaker from 2020 to 2022, and retired after Datuk Johari Abdul was appointed as the new Dewan Rakyat Speaker for the current parliamentary term. He is now practising law in Messrs Azhar & Goh. (The Edge)

Source: Mplus Research - 14 Mar 2023

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